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Dramatic Numbers

January 9, 2012 admin

Monday was a strange day for Real Estate in Vancouver. It’s normal this time of year for listing to outnumber buyers as people who haven’t managed to sell relist their property, but the ratios paulb just posted are mindboggling:

New Listings 376
Price Changes 56
Sold Listings 43

And as he also points out, the Westside is nuts:

New Listings 96
Price Changes 10
Sold Listings 5

Yes, that’s right. 96 new listings on the west side of Vancouver on one day and only 5 sales. Any idea whats going on here? Were there so many listings that all the sales didn’t get entered, or did we really just have crazy sales/ list ratio day?

And if your in the mood to contemplate dramatic numbers check these out, courtesy of McLovin:

Buddy got his assessment in Kelowna. He owns a 2 br condo with great view of the lake in the Skye building. Paid $660,000 presale in 2007 incl GST. Took possession in 2009.
2011 Assessment $631,000
2012 Assessment $541,000
Drop of 18% in 1 yr and over 20% from his presale purchase price in 2007.
Truthfully, if he had to sell the place he would be lucky to get $500,000. So he is down about 25% and there is no bottom in sight.

As Makaya points out:

to put things in perspective, assuming your buddy took possession exactly three years ago and sold it today for $500K, he has “lost” $4,444 on his house every month. I hope he’s making a good salary to compensate.

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1 in 4 newlists in VW? Wowzas

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Anonymouse

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Numbers were similar on Jan 11th last year – check the Market Data forum.

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@DEFAULT NAMEe:

Why does the comment ticker on the right say

"Anonymouse: Numbers were similar on Jan 11th last year – check the Market Data forum." Isn't this DEFAULT NAMEe?

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@VMD: Unfortunate wordpress bug. Anonymouse was previous name.

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January 2012 data Average Sales 52 Total Sales 259 Average Listings 274 Total Listings 1371 Average sell/list 19% Days in month 21 Days elapsed 5 % days elapsed 24% Expected sales 1,088 Expected listings 5,758 Max daily sales 76 Min daily sales 30 Max daily listings 376 Min daily listings 217 January 2011 data at same point in month Average Sales 78 Total Sales 388 Average Listings 225 Total Listings 1125 Average sell/list 34% Days in month 20 Days elapsed 5 % days elapsed 25% Expected sales 1,552 Expected listings 4,500 Max daily sales 98 Min daily sales 40 Max daily listings 267 Min daily listings 165 January 2011 month end data Average Sales 94 Total Sales 1,876 Average Listings 241 Total Listings 4,820 Average sell/list 39% Days in month 20 Days elapsed 20 % days elapsed 100% Expected sales… Read more »

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RaggedyRenter

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I'm cautiously optimisic. Daily data can be skewed by lots of things including the clerks just don't feel like working today.

However it's shaping up to be an interesting year to say the least.

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"to put things in perspective, assuming your buddy took possession exactly three years ago and sold it today for $500K, he has “lost” $4,444 on his house every month."

That's just the capital loss. His total loss is much more than that because his monthly expenses have far exceeded renting.

This is something a lot of people miss and I'm thinking about making a posting about how massive this loss can be in the long run.

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patsan

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PaulB,
Is there any chance to get info from MLS for number of listings where agent = owner?

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Fishbowl

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Yawn….

Same misplaced bear excitement…

The normal "surge" of listings is viewed as a rush to the exits…

Same thinking for 7 years now…

Of course, you will never see a post about several days of uber "bullish" numbers…and you never have…

Daily noise folks…the trend is your friend as that dipshit Romeo Jordan…of course the trend has been and is your friend if you are a bull..

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specialfx3000

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2 br condo for $660,000 in Kelowna? That's crazy. Some people just needs to learn the hard way. With the high listing, I have 2 theories. Some that bought in the last couple years decides to throw it back in the market for a quick 10-20% quick profit. These will be noisy listings that will remain stale for many months to come. These guys stand at the top of the pyramid with no further fools to pass to. Some old timers see their assessments and hear all the global doom and gloom and decide now is a great time to cash in their moldy homes for a huge winfall. I think this group will be willing to take less than today's market price and still be extremely happy. So in the next few months, benchmark will lower each month. Like… Read more »

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Anonymous

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RE: Westside

The question is how many of those listings on the westside are speculators/flippers and how many are long time home owners trying to cash in on the latest run up in prices. If it is the former prices could correct very quickly. If it is the latter most of these listing will likely be pulled at some point over the next 6 months if they don't sell.

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@DEFAULT NAME: "how many of those listings on the westside are speculators/flippers"

It turns out that Vancouver is big enough, and people's motives too diverse, grey and confusing, that second-guessing individual intentions is probably not worth much bother. We know that even through severely bearish conditions that price changes are highly negatively correlated to months of inventory.

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YLTN @ Work

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@specialfx3000: The old timers aren't that keen to cash in, my folks have two places, one in Van and one on the island that they like to visit about once a month. I created a model for them that showed even with a modest 3% decline they are better to sell and take a loss now than hold on and still stay at the empress every weekend amg be ahead. They refused and said they like to open the closet and have their stuff and if things got bad they could rent it out. I next showed them that if they sold now, at a loss, and rented a place over there, they would still be better off and de-risked. Their response was "How do I know it could go down 3%?". My response was I don't but Van has… Read more »

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Vansanity

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I'm bearish but I tend to agree wiht fishbowl… this happens every new year as the expired listings relist and outpace sales. Nothing to get worked up over. Wake me up when listings surge to 20,000.

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trash crash alert

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Market is simply imploding and all we will be left with is cardboard boxes and leaky concrete towers with foggy windows.

I say this again, CMHC made a critical error in insuring the 'land' component of real estate rather then just the 'building' component. Result is a cardboard fueled economy of box stores and crappy built synthetic plastic glue houses with photocopy floors.

Now the land component will implode down to true market value to be determined by wealth creation of local economy as smart Asian investors head home with capital. Vancouver price level will ultimately go lower then Montreal. Good 75% LOWER!!

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Anonymous

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of course the trend has been and is your friend if you are a bull..

Life is perfect when you are looking in the rear view mirror. Unfortunately you need to keep looking out the windshield so you don't wrap your car around the telephone pole that is coming at you at 100km/h.

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WFT?

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Based on these numbers the sell list is a whopping 1/2 of what it was at this point in January 2011.

I'd say that so far this is a dramatic bearish change in the numbers compared to January of last year. It is not at all "January as usual"

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Best place on meth

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>>>Numbers were similar on Jan 11th last year – check the Market Data forum.<<<

Oh sure, 376 listings is very similar to 261 listings.

Only 44% higher but practically the same.

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WFT?

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More real estate warnings from the big banks int he MSM today:
http://www.theglobeandmail.com/report-on-business…

"Two of Canada’s biggest banks are expressing caution over the Canadian housing market in the year ahead, particularly in Vancouver and Toronto."

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Yalie

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RBC has conducted stress tests on its books for a decline in housing prices of as much as 25 per cent. Though the bank doesn’t figure that dire situation will happen, RBC is comfortable its lending operations could withstand such a large hit if it were to occur.

No kidding they can handle a "large hit". I could also withstand a huge price decrease if I could borrow at 1%, lend at 4%, and recover 100% of any losses in the case of a default.

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@Yalie: Indeed. The question is whether the insurer (CMHC and the government) are as sanguine as these banks. BTW TD has also expressed some concern over prices in Vancouver:

http://www.theglobeandmail.com/report-on-business…

The drums are beating louder…

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"The old timers aren’t that keen to cash in, my folks have two places, one in Van and one on the island that they like to visit about once a month."

Old timers are never keen to cash in. That's not what makes busts happen. Busts happen because new buyers dry up and speculators cash out.

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Yalie

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I did a search for "CMHC stress test" and found this from their own website:

http://www.cmhc-schl.gc.ca/en/corp/nero/jufa/jufa…

CMHC’s latest stress test, which applied 10,000 economic scenarios combined with plausible adverse business scenarios, concluded that the corporation’s probability of insolvency is less than one half of one per cent.

I'd really like to know if one of those "10,000 economic scenarios" included a 30% drop in house prices, and what probability they put on that event.

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YLTN @ Work

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@patriotz: Yup, I totally agree and that's why I'm hoping for a max amort down to 25 years to price out the FTB

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"I’d really like to know if one of those “10,000 economic scenarios” included a 30% drop in house prices, and what probability they put on that event."

No doubt zero, since it's never happened nationwide post-WWII. Just like the bond rating agencies in the US gave it zero since it had never happened nationwide post-WWII.

Bubble? What Bubble?